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Overtime pay on Holiday

If an employee is given a paid Holiday, but works 2 hours on the date is it considered overtime?

No. Under federal FLSA, overtime occurs when an employee works more than 40 hours per week. The key word here is “works.” Vacation pay, holiday pay and sick time are not time worked, therefore they do not count when calculating overtime.

Suppose employee Raj works 35 hours this week, including 2 hours on a paid holiday. In addition, Raj is paid 8 hours of holiday pay. Raj is entitled to payment for 43 hours total for the payroll week. However, all of that time can be at his regular rate, because he did not work more than 40 hours in the payroll week. He is entitled to payment of 35 hours for time worked, plus 8 hours at straight time for the holiday, for a total of 43 hours of straight time.

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